Gold surges to all-time high of Rs 18,629
As debt crisis in Eurozone continues , gold price on Wednesday rose further to an all time high of Rs 18,629 per 10-gram in the Indian market as against the previous day closing of Rs 18418. In the global markets also, the yellow metal appreciated by over 1% to trade at $1,213.5 an ounce as against Tuesday's closing in New York at $1,200.1 per ounce.
In India the appreciation in the gold price is even sharper because of the depreciation of rupee against dollar. However, the main reason for the price rise in the global market is heavy investment demand in the European markets in the wake of weakening euro. According to a senior bullion merchant, investors from Germany and Switzerland are investing in gold as a hedge to the depreciation in euro against dollar.
It is being feared that the implementation of $1 trillion rescue package to purchase Eurozone government bonds to contain the spread of debt crisis might create inflationary pressure in the region. This will lead to weakening of the euro. Silver also shot up on persistent industrial buying. Silver appreciated by Rs 445 per kilo to Rs 29,410.
Despite rising prices, the demands for the metal remained strong due to the wedding season in India. In a latest report, World Gold Council said that the metals demand is expected to be strong during 2010, due to increasing interest for jewellery in India and China irrespective of high local prices.
"Demand in India and China will continue to grow driven by jewellery demand, in spite of high local currency gold prices," WGC's gold demand trends report said. It said, in January-March 2010, India was the strongest performing market as total consumer demand surged by 698% to 193.5 tonnes. In China the demand proved resilient and increased 11% in Q1 2010 to 105.2 tonnes.
"The diversity of demand for gold, both by sector and geography ensures that the outlook for gold remains strong for the remainder of 2010. Despite increasing gold prices, consumers in China and India will continue to drive market growth, particularly in jewellery ," WGC CEO Aram Shishmanian said.